Credit Suisse are out this morning with the mainstream view on the banking sector, remaining overweight (read: nothing else worth investing in) going into this year.
The main reasons:
- Regulatory capital rules are now clearer (acknowledging Basel IV to come), “jumbo” capital raisings are complete (for now) and
- Multiples are if not attractive (relative and / or absolute) at least provide a degree of downside protection;
- Residual relative “safe haven” status referred to above persisting; and
- Fixed income market anticipation of another phase of easing in the domestic cash rate cycle (which bank stocks are positively correlated to).